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Global sustainability trends

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Our sector is crucial to delivering global goals

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The challenge we face

Source: 2018 Global Status Report, International Energy Agency for the Global Alliance for Building and Construction

By 2050, global population will increase

27% to 9.8bn and global floor area

will increase by 100%

• Buildings are responsible for

39% of global carbon

emissions

• Energy demand will increase

by 50% by 2050

Climate action Resource efficiency Health and wellbeing

• 91% of people live where

air pollution levels exceed World Health Organization limits

• People are 40% more likely

to have asthma due to living in a home with damp or mould

104 of 194 countries that signed the Paris

Agreement have committed to improve building energy efficiency to meet mitigation targets.

Only 68 countries currently have building energy codes.

• Buildings are responsible for

50% of global material use

• 42.4bn tonnes of

materials consumed annually

Resource efficiency Health and wellbeing

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Our Strategy: drive sector impact

Introducing:

Global Net Zero Carbon Buildings Commitment

Your buildings. Net zero. 2030.Launched September 2018 and celebrated in 2019 with new signatories.

““This new Commitment is a huge step forward on the path towards net zero. The Commitment will help to create unprecedented demand, stimulating the market to deliver net zero carbon

buildings at scale.”

Cristina GamboaChief Executive OfficerWorldGBC

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32Organisations

25Cities

6States & Regions

OrganisationsAESG

AMP Capital Wholesale Office Portfolio

Armstrong Fluid Technology

Bennetts Associates

Berkeley Group

Bionova

Brandix

Bruntwood

Cbus Property

Commonwealth Bank

Cundall

Dexus

Ecoreal Oy

Foster + Partners

Frasers Property Australia

GPT Wholesale Office Fund

Integral Group

JLL UK

Kilroy Realty Corporation

Kingspan

LG Super

Majid Al Futtaim

Monash University

Multiplex Global

Natural Resources Defense Council

Nightingale Apartments

Salesforce

Salesforce

Shaw Contract

Signify

Stockland - Retirement Living & Logistics

Sydney Opera House

CitiesCape Town

City of Melbourne

Copenhagen

eThekwini

Heidelberg

Johannesburg

London

Los Angeles

Medellin

Montreal

New York City

Newburyport

Oslo

Paris

Portland

San Francisco

San Jose

Santa Monica

Stockholm

Sydney

Tokyo

Toronto

Tshwane

Vancouver

Washington DC

StatesBaden-Württemberg, Germany

California, USA

Catalonia, Spain

Navarra, Spain

Scotland, UK

Yucatan, Mexico

609buildings

8.0msquare meters

562ktCO2e portfolio emissions

1,220fitouts

The Commitment in Australia

14,420,370Tree seedlings

grown for 10 years

0.14Coal-fired power

plants in one year

120,427 Passenger vehicles driven for one year

60,734 Homes’ energy

use for one year

Organisations

AMP Capital Wholesale Office Portfolio

Cbus Property

Commonwealth Bank

Cundall

Dexus

Frasers Property Australia

GPT Wholesale Office Fund

Integral Group

LG Super

Monash University

Multiplex

Nightingale Apartments

Stockland - Retirement Living and Logistics

Sydney Opera House

City of Sydney

City of Melbourne

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Introducing:

Bringing embodied carbon upfrontCoordinated action for the building and construction sector to tackle embodied carbon.

Net zero carbon in operations,40% less upfront embodied carbon.

Net zero carbon in operations, net zero embodied carbon.

2030

2050

Market trends – investor

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Source: World Economic Forum Global Risks Perception Survey 2017–2018

• Strong investor concern that corporations are underestimating financial risks from climate change

• TCFD provides a framework for investors to demand consistent and transparent disclosure

Market trends in Retail – Taskforce on Climate related Financial Disclosures

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• The Task Force was established as part of the G20 Financial Stability Board to enhance organisational consideration and reporting of financial risks related to climate change

• The TCFD recommendations are designed to solicit consistent, decision-useful, forward-looking information on the material financial impacts of climate-related risks and opportunities, including those related to the global transition to a lower-carbon economy. They are adoptable by all organizations with public debt or equity in G20 jurisdictions for use in mainstream financial filings.

• Published recommendations for climate-related financial disclosures, including typology of ‘transition’ and ‘physical’ risks and opportunities

• Recommends integrated of climate-related disclosures into mainstream financial reporting

Market trends in Retail – Taskforce on Climate related Financial Disclosures

Modern Slavery & Procurement risk

• Modern Slavery Act 2018 – both Federal and NSW requirements

• Managing the complexity of modern supply chains

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Market trends in Retail – Green finance

Global trends linked to property trends

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Market trends in property– consumer brands

Volume CertificationINTERIORS

Retailers like Commbank and Westpac have developed their retail branch design standards around Green Star. Part of this is to ensure the best possible customer experience for clients and staff.

This has been taken to the next level at Barangaroo South, where the vision of the worlds most sustainable precinct comes to life with every single retailer (over 80) registered to achieve a rating thanks to Volume certification.

Volume trends

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Renewables trends

EVERY BUILDING COUNTS

A practical plan for emissions reduction

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More evidence to validate the use of sustainability rating tools.

42,000people living in Green Star

rated homes and apartments

725,000 people working in

Green Star rated offices

425,000 more people living in Green

Star rated communities

More evidence available for Green Star quick factsSince 2003, Green Star has been improving the places where Australians live, work, and play:

When compared to buildings constructed to meet minimum standard, Green Star rated buildings:

Produce

55%fewer emissions

Use

66%less electricity

Use

51%less water

Recycle

96%of waste

* Value of Green Star: A decade of environmental benefits, Green Building Council of Australia (2013)

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Cost of Green Star validated

+0.9% To achieve a

4 star Green Starrated building

Per square metre

Based on a sample of 71 projects, as at December 2018

Delivering Green Star rated buildings makes economic sense.

+2.6% To achieve a

5 star Green Starrated building

Per square metre

+2.7% To achieve a

6 star Green Starrated building

Per square metre

Government procurement: energy savings

Using data from NABERS, which is embedded in Green Star, government buildings have decreased energy consumption by close to 50% over the last decade.

On a typical commercial office building of 30,000sqm this could be over $400,000 dollars per annum.E

ne

rgy

use

in o

ffic

e (

MJ/

m2)

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Economic benefits validate in valuations

*Source: MSCI/PCA Green Property Index 2018 Figures shoe Green Star (CBD) vs all office (CBD)**Source: Stok – The Financial Case for High Performance Buildings 2018

Green Star rated buildings deliver a 5.6% premium in value and a 13.4% premium in net

income*

Increased tenant demand is reflected in lower vacancy rates for Green Star rated buildings, with an 26.4%

increase in Weighted Average Lease Expiry*

Research out of the US in 2018 found that by designing

for the occupant, owner-occupants and tenants can gain $3,395 per employee in

annual profit**

Global trends link to future rating tools …and materials

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• Guarantee minimum outcomes

• Set tenant benchmarks

• Mandate operational rating

What we asked:

• Meet Paris Agreement obligations

• Redefine world leadership

• Promote better best practice

100%

97%

93%

• Address social sustainability

• Drive change in the supply chain

• Bring back nature to our built environment

97%

97%

97%

97%

80%

84%

Future of new buildings tool

1. A new definition of a sustainable building

2. Meets the Paris Agreement targets

3. A clear definition of best practice

4. A rating tool for a diverse built environment

5. A showcase for exceptional achievements

The five things you should know about

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A new definition of a sustainable buildingGreen Star for New Buildings features eight new categories representing the issues that will define the next decade of the built environment.

Clean air

Light quality

Exposure to toxins

Noise levels

Amenity and comfort

Mobility

Collaborative design and construction

Sustainable procurement

Sustainable products

Responsible construction practices

Verification and monitoring

Handover and tenant engagement

Climate change resilience

Infrastructure dependency

Resilience to other impacts

Stakeholder engagement

Community resilience

Resilience communication and review

Energy and peak demand

Energy source and fossil fuels

Other carbon sources

Using water sustainably

Carbon in materials

Impacts from resources

People movement

Goods movement

Enjoyable places

Access to amenity

Contribution to place

Community engagement

Culture and heritage

Design for diversity

Aesthetics

Privacy

Impacts to nature

Human connection to nature

Water pollution and runoff

Habitat creation

Nature connectivity

Offsite restoration

Exceptional performance

Leadership in sustainability

Innovation Challenges

Materials

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1. 10% more energy efficient than 2019 code.

2. Designed and built with climate change in mind.

3. Installed water efficient fixtures and appliances

4. Commissioned and tuned to operate optimally over time.

5. Reduced environmental impacts from construction practices

6. Meters and monitors the building’s energy and water use.

7. Has active transport facilities

8. Improved air, light and noise quality in regularly occupied spaces

9. Reduced or eliminated materials with toxic chemicals

10. Transferred sustainability-related information at handover

The 10 things expected from every Green Star rated building:

A clear definition of best practiceLow energy and water use, with good indoor environment, and designed to be mindful of future climatic conditions. Green Star for New Buildings requires this of every building.

Sustainable products Sustainable structure

Sustainable envelope

Sustainable systems

Sustainable finishes

Sustainable partitions

Sustainable furniture

Sustainable equipment

Bu

ildin

gs

Fit

ou

ts

Sustainable fitoutsSECTOR SPECIFIC

TODAY

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What was described in the consultation paper in Green Star for New Buildings

Credit Outcome

Sustainable products Incentivises environmentally responsible selection of materials for major building components through the use of products with eco-labels, Environmental Product Declarations (EPDs), and responsible sourcing schemes. It also promotes other circular economy solutions.

Responsible

Initial proposalSustainable products% of materials that have as much of each as possible

Responsible: Environmental impact reduction

• Environmental responsibility certification (FSC or PEFC, Better PVC, Manufacturer EMS, Carbon Neutral Certification.

Stewardship: Socially responsible products

• ResponsibleSteel, PVC stewardship, FSC / PEFC / Responsible Wood, Human rights verification, B Corp, etc.

Transparency: Disclosure of impacts and high quality products

• EPDs, ILFI Declare, REACH declaration, Health product declaration, Type 1 ecolabels (GECA, Greentag, C2C)

Foresight

• Material investment in innovation to reduce carbon footprint

• Design of products, Durability, Low-impact maintenance, waste minimisation in production and installation, ‘Next life’ philosophy: enabling reuse and recovery for recycling

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Thank you

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